The Powering Past Coal Alliance (PPCA) was formed by the Canadian and UK governments to bring together the main actors working on the transition away from coal. About a third of the world's governments are now members of the PPCA, as well as financial institutions with over $12 trillion of assets under management, sub-national governments, utilities and system operators. Argus spoke to PPCA head of secretariat Julia Skorupska about how achievable a coal phase-out is, and the organisation's strategy to help achieve this. Edited highlights follow.
What are some of the unique challenges Asia faces compared with other regions when it comes to phasing out coal?
Asia is very dependent on coal. I think it's becoming increasingly clear the benefit that countries in the region see from the transition from coal to clean energy. It's a region that is very focused on manufacturing in many places, and I think people really see the kind of opportunities of being able to demonstrate they have a clean supply chain.
But at the same time, it's a region in which coal power plants tend to be pretty young. The average age is 15 years for coal power plants in the region, and their expected lifespan is still around 15 years, maybe more. So there are debts that still need to be paid off, often very long-term power purchase agreements that people need to exit in order to transition away from these coal power plants.
The other thing that is really striking is the region has very fast-growing demand for energy, so we need to think about how we're going to meet this demand, and obviously maintaining economic growth is a real priority for the region.
How does the PPCA plan its strategy for Asia, given that there are huge variances across the region in terms of energy needs?
There are countries that are kind of really forging ahead with the transition to clean energy, like Vietnam, where you see a lot of investment going there, and the Philippines, which is doing a lot to try and bring on renewables and has been a real leader in terms of encouraging companies to think about how they would phase out their coal power plants early.
There's the question about where countries are at, but also what their market structure is. Is it a state-owned market structure? Is it a structure with lots of independent power producers (IPPs)?
We understand it's not a one-size-fits-all answer. The fundamental thing is that you need to have a clear plan. You need to have a level playing field for renewables.
We have tried to come up with some recommendations, for example carbon pricing, which might work best in some of the deregulated markets. And where you have a kind of single buyer and a state-owned enterprise, you actually have some opportunities to leverage off that coherent market to make a transition more quickly.
How do you think the presidency of the UN's Cop 30 climate conference this year is going to approach the question of transitioning away from coal and fossil fuels, after it was sort of abandoned last year? What kind of outcome is the PPCA after at Cop 30?
I was in Brussels last week and the presidency held a gathering to get ideas on what should be on the energy agenda. I think their focus is very much on this being the Cop of implementation. This is the Cop where we're demonstrating that we are delivering the global stocktake [which measures progress against the goals of the 2015 Paris accord]. So not only on tripling renewables, not only on doubling energy efficiency, but also on the transition away from fossil fuels.
At Cop 28 we launched a coal transition commission. We now have recommendations, which we launched at Cop 29, so I think the focus now is on demonstrating that we're delivering.
Cop is taking place after people update their nationally determined contributions (NDCs), which is another opportunity to demonstrate implementation. So we're very much focusing on encouraging countries to reflect a commitment to no new coal in their NDCs as a first step towards making that plan for transition and securing the investment they need.
What are some of your strategic priorities over the next couple of years?
Really supporting southeast Asia to move ahead with a transition from coal to clean power is a key priority for us. And under the coal transition commission, we're working on the question of how to scale. Now we've had the first pilot projects, how do you support transitions out of coal? What can we learn from those first pilot projects?
It seems to me like the answer that we're getting is that there actually are solutions that could be scaled. For example, there are a number of ways in which you can use private finance to bring forward the retirement of coal power plants, particularly in more market-oriented situations with lots of IPPs.
The transition will be a process, and it's a region where people are often using less gas during the transition than in other parts of the world. And so what is the role of coal as they integrate renewables, and how do they ramp down the coal? So one of the things we'll be looking at is how we're using coal to support that integration of fossil fuels, and how are we making sure that people are able to access the finance they need to make the adjustments to the system as they ramp down coal on the pathway towards phase-out.
The final area we'll be looking at is just transitions, where it feels like there's lots of good practice now — like some of the lessons learned in Indonesia from the Cirebon project, and good practice in Australia — to help us think about what are the kind of lessons that can be learned as we develop new coal retirement mechanisms to make sure that just transition is really at the heart of those.
What is the realistic timeline you envision for a global coal phase-out?
We should be targeting a 2040 phase-out of coal to be on a pathway aligned with keeping the global temperature rise below 1.5°C. A lot of countries aren't yet there, in terms of being able to think that they can maintain a secure supply of energy, meet their growing energy needs and phase out coal by 2040.
Our advice to people is make your plan, set a phase-out date, and then you will find that probably you can move that forward. Don't panic if your phase-out date when you initially set it is going to be beyond 2040, the key is to set that phase-out date.
And then the community can come together to help you to think about how you move it forward. Let's focus on what we can we think about — we are going to transition out of coal, everyone is committed to accelerating the phase-down. Let's come up with a plan and then we can improve the plan as we go along.
